Revenue drops 46 percent in a month

Oct. 24, 2013

Endicott Interconnect Technologies Inc. filed for bankruptcy on July 10, when this photo was taken. / File Photo

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Endicott Interconnect Technologies Inc. experienced a net loss of nearly $1.2 million in September, according to new financial records filed in U.S. Bankruptcy Court this week.

The September monthly operating report shows EIís business activity declined in the month before a federal bankruptcy judge approved an order on Oct. 3 authorizing the sale of EIís assets to a corporation owned by minority shareholder Jim Matthews Jr.

The operating loss last month coincided with a 46 percent drop in EIís net revenue from August to September.

EI took in revenue totaling $10.2 million in August, and after expenses for labor and other costs, earned a gross profit of $5 million, according to bankruptcy court records.

For September, the monthly operating report lists total revenues of $5.5 million and a gross profit of $2.4 million. The overall $1.2 million net loss, however, accrued after calculating other costs such as payroll, insurance, leases, taxes utilities and other business expenses.

An EI spokeswoman could not be reached for comment Thursday.

EI paid $1.1 million in salaries, commissions and fees in September, the financial report states

August and September are the only full months for which EI has submitted monthly operating reports in U.S. Bankruptcy Court. The standardized financial statements are a requirement under federal bankruptcy laws.

After filing for Chapter 11 bankruptcy protection July 10 with $6.1 million in cash on hand, EI ended September with $3.4 million in cash.

While EIís operating finances took a downward turn, September was a pivotal month for the Endicott-based operation.

At a Sept. 26 hearing in Utica, U.S. Bankruptcy Judge Diane Davis approved a bid from Integrian Holdings LLC to purchase EIís assets. A written order was signed on Oct. 3

Integrianís bid, one of six submitted in the bankruptcy process, is largely based on the elimination of $16.1 million of EIís secured debt ó most of which is owed to Integrian itself. The company is owned by Matthews, whose family owns a controlling interest in EI.

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EI paid $125,492 to Integrian in September for principal and interest on a loan, bankruptcy records show. The company also paid its Chief Restructuring Officer, David Van Rossum, $19,230 in salary and its Long Island-based financial consultant, Feather Lane Advisors LLC, $24,607.

The September financial report lists $39 million in assets for EI. At the start of the bankruptcy process, EI had $44 million in total assets.

Also listed in the September report are liabilities totaling $91.1 million as of the end of the month.

According to the financial statement, $87.2 million of EIís liabilities are from before its Chapter 11 bankruptcy petition was filed July 10 and are listed under the heading ďsubject to compromise.Ē Another $3.8 million of EIís liabilities accrued after the initial bankruptcy filing.

According to bankruptcy court records, EI was driven to file for bankruptcy protection after suffering operating losses of nearly $100 million between 2009 and 2012.

A microelectronics manufacturer founded in 2002 as the successor to major IBM Corp. operations in Endicott, EI benefited from millions in state tax credits and other subsidies.

Between January 2012 and the filing of its bankruptcy petition in July, EIís workforce declined from more than 1,100 to less than 600 employees.